The COVID-19 pandemic changed the landscape for stocks, accelerating trends that benefited some companies while pushing others to the brink of bankruptcy -- or over the edge and into it. Now that approval of multiple coronavirus vaccines seems imminent, investors are trying to predict which stocks will do well once the threat recedes.

Long-term investors should be looking at the situation in a slightly different way. Companies that have technology or market positions that will sustain them as leaders or disruptors of their industries are likely to keep paying off for their shareholders long after the current chaos subsides. The prospects of some companies have actually been strengthened by the pandemic for the long term.

One such company is genetic-testing specialist Fulgent Genetics (NASDAQ:FLGT). The pandemic dropped a windfall in its lap and turned it into a coronavirus stock. Now, the market is reassessing the value of the company based on the idea that its tailwinds will soon go away, and its share price has fallen by 31%. But this health crisis has permanently improved the company's prospects, creating an opportunity for patient investors.

Pipette poised over rows of test tubes.

Image source: Getty Images.

Fulgent's coronavirus tests have been game-changers for the company

Fulgent Genetics can hardly raise guidance fast enough to keep up with its business. When the company reported on Nov. 9 that third-quarter revenue was up 880% year over year, it raised guidance for full-year revenue by a whopping 74% to $235 million. Then on Nov. 23, it raised that estimate another 28% to $300 million.

This revenue surge has been driven by its PCR tests for SARS-CoV-2, including an at-home version, which have been wildly successful. Fulgent's core business is low-cost genetic testing that it hopes will become part of standard medical care in time. But the company's technology enabled it to develop COVID-19 tests rapidly, and it seized the opportunity. The result was  a revenue stream that is dwarfing the core business at the moment.

The recent flurry of upbeat reports from COVID-19 vaccine makers has investors anticipating a significant decline in demand for coronavirus testing. As is often the case, the market is probably right about the short-term impacts, but missing out on the long-term picture. There are several reasons why Fulgent is a buy now.

The longer view

First of all, COVID-19 testing will continue to be needed for a longer period than people may be thinking now. Even with vaccines being distributed widely in the first half of 2021, there will continue to be outbreaks of the disease, and employers will want to continue to test employees for it routinely well into 2022. And even if this income stream eventually goes away, the company is making boatloads of cash now that it can invest in expansion.

Second, the pandemic has boosted Fulgent's name recognition, and the company has acquired a throng of new customers to which it can cross-sell new products. In fact, Fulgent developed an enterprise software platform that large companies, government agencies, and hospital systems are using to manage testing and vaccination records, and which will be extended to support influenza vaccinations. This sort of health-tracking capability will probably remain standard practice for employers long after the pandemic subsides.

But possibly best of all, the pandemic demonstrated how adaptable Fulgent's technology and capabilities are. The public acceptance of health-related testing has been boosted forever by the pandemic, and the world won't want to get caught flat-footed the next time an infectious disease threat emerges. That will indirectly benefit Fulgent's core business of testing for 5,700 genetic conditions, and will also create opportunities for new lines of products that haven't even been envisioned yet.

Investors who buy small-cap stock Fulgent Genetics now at 7 times estimated 2021 EPS could make a lot of money in the next three to five years. But it may be better to buy a little now and add to the position over time; this stock could still get a lot cheaper in the near term.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.